Developer has plans to upgrade two Main Street Worcester buildings

Monday

Dec 31, 2012 at 1:00 PMDec 31, 2012 at 6:09 PM

By Nick Kotsopoulos and Bob Kievra TELEGRAM & GAZETTE STAFF

The ongoing revitalization of the downtown is gaining more momentum heading into the new year, as a Westboro-based development group has acquired two underutilized properties on Main Street and intends to renovate them into market-rate housing geared to graduate students and young urban professionals.

SJ Realty LLC today acquired 371-379 Main St. and 381-385 Main St. — two buildings that have been long-time fixtures on Main Street, with a combined gross area of more than 43,000 square feet. The new owner said the buildings were purchased for $1 million from Dean Marcus and his family, which had owned them for decades.

“We’re pretty excited about it,” said Daniel E. Jalbert, partner in SJ Realty. “To do this five years ago would have been premature, but I think Worcester is ready to have this influx of students living downtown.”

Both buildings were constructed in the 1880s and while they have retail and/or entertainment tenants on their first floors, their upper floors have long been underutilized and substantially vacant for more than 20 years.

The developers want to renovate the upper floors of both buildings into 60 micro-loft units, with the goal of having about 30 of the units completed and on-line by Sept. 1, with the balance to be completed soon after.

SJ Realty is actively negotiating potential leases with local colleges to meet their growing graduate student housing needs, according to City Manager Michael V. O’Brien.

He said the combined projects are being funded by Bay State Savings Bank. He said SJ Realty’s desire to invest in Worcester, with local lending by Bay State Savings Bank, is another positive sign of progress in the downtown.

Peter B. Alden, president and chief executive officer of Bay State Savings Bank, said the project will help reshape downtown. “There’s a lot of positive upside to this,” he said.

Mr. Jalbert said he and his partner, Russell Stewart, expect graduate students from the Massachusetts College of Pharmacy and Health Sciences will be the key tenants in the units, which will be between 300 square feet and 400 square feet each and likely accommodate one student.

Mr. O’Brien said the purchase will be a productive reuse of Main Street real estate.

“We are creating and facilitating the layering of the local micro-economy of our downtown with new market-rate residential, commercial, retail, entertainment, academic living and learning, cultural and public investments — the proven recipe for long-term success and 18-hour day positive activity and vitality,” Mr. O’Brien said. “This will complement the other activity and infill projects under way, from Lincoln Square and Gateway Park, to Federal Square, to CitySquare and beyond.”

The three-story building at 371-379 Main St. is 13,944 square feet in size and has an assessed value of $708,300. The tenants include Markos Jewelers and a Super Variety store. The second and third floors are vacant.

The five-story building at 381-385 Main St. is believed to have been owned by the Marcus family since the 1930s. Its gross building space is 29,070 square feet and is assessed at $839,000.

The retail tenants on the building’s first floor include State Opticians and Cantina Bar and Grill. There are various tenants on the second floor while the third, fourth and fifth floors are vacant.Both buildings will undergo $3 million to $4 million in renovations to meet current building codes, market-rate standards and tenant expectations, Mr. Jalbert said.

Each micro-loft unit will include a ceramic bathroom, kitchen, living area and central air systems, and they will be fully furnished. Some units will also include double occupancy, Mr. Jalbert said.Benoit Reardon Architects of Worcester is the project architect; Chuck Scott is the project engineer.

“Cutting-edge ideas are coming to Worcester because we have a landing pad,” said Councilor-at-Large Frederick C. Rushton. “It’s out of the core area of CitySquare and it shows that spin-offs are happening.”

The micro-lofts encourage people to circulate downtown and both buildings will have common areas for studying and collaboration, Mr. Jalbert said. A vibrant downtown needs students and urban professionals eager to exit their housing units, he said.

“You can’t bring a steel door down at 5 p.m. and make the downtown pleasing,” he said.The plans for the two Main Street properties come amid of flurry of activity that is taking place in the downtown.

The long-awaited opening of the extension of Front Street, through to Washington Square, occurred today, and Unum will soon be moving into its nearly completed new office building in CitySquare.

Meanwhile, work is moving head on completion of the new St. Vincent Hospital Cancer Center, also located in CitySquare, and the new home of the Worcester Regional Transit Authority’s administrative offices and central transfer hub for its bus service next to Union Station.

In addition, Worcester Polytechnic Institute recently entered into a license agreement with the city that, in essence, gives it preferred developer status for the acquisition and renovation of the former Lincoln Square Boys Club. WPI is looking at the vacant, city-owned building as a potential site for its business school and for a new business incubator for start-up companies.

Also, the Worcester Business Development Corp. is readying for the renovation of the former Telegram & Gazette building at 20 Franklin St., and Commerce Bank is in the midst of a major renovation of the Slater Building at 370 Main St., which it purchased to house its expanded corporate headquarters and new tenancies.

“Each major development, each storefront renovation, each new market-rate residential project are building blocks for our collective efforts -- building by building, street by street, block by block,” Mr. O’Brien said. “There will be more positive announcements in the coming months of this public-private effort underway to achieve our collective goals of breathing new life into our downtown.”